Cinematic TV dramas spark a revolution in online viewing

US online distributors look to copy success of BBC iPlayer as 'boxset' culture grows among viewers

The growing popularity of more cinematic drama serials such as Mad Men, above, is changing the way we watch television. Photograph: BBC/AMC/Lionsgate/Frank Ockenfels 3
BBC/AMC/Lionsgate/Frank Ockenfels 3/PR

As more television viewers choose to watch their favourite shows on "catch-up services" or by recording whole series in bulk, American online distributors are planning a revolution in the way we are presented with high-quality drama.

Internationally acclaimed series such as The West Wing, Sex and the City, The Sopranos, Lost, The Wire, Mad Men and The Killing have been setting the cultural agenda for some time. But now the industry has woken up to the fact that these shows are affecting the way much of the public watches television.

American online programme services such as Netflix – along with rival providers Facebook, Yahoo, Amazon, YouTube and Hulu – are moving to capitalise on the fact that the most popular shows being streamed on their sites are drama series. "Maybe we will start to premiere multiple episodes so you can do the binge-watching from day one," Ted Sarandos, head of content for Netflix, suggested.

Speaking this month at Mipcom, the annual TV marketplace held in Cannes, Sarandos revealed that up to 60% of the filmed content viewed on his site is television programming and that shows such as Mad Men are top of the popularity poll. As a result, his company has started to buy series directly from the producers and distributors who financed them: cutting out the TV networks and cable channels. It now plans to make these shows available as early as possible, during what is known as "the first-run window".

Among Netflix's first purchases is the political thriller House of Cards, an American remake of the successful British television adaptation of Michael Dobbs's novel, which will feature Kevin Spacey among its onscreen stars and producers. Netflix has also bought the Renaissance Italian drama, Borgia, starring Art Malik, a European rival to the Showtime series The Borgias, which stars Jeremy Irons.

The change in viewing habits has also jogged the youth-oriented US service Hulu into buying the cult British series Misfits, which goes out in Britain on E4. In a dramatic shift in practice, Hulu, which developed its business by supplying TV shows aired on expensive cable channels, took a gamble on the forthright show and got lucky.

"American cable channels can be conservative, and we needed to find the right place in America because of the rudeness of Misfits," Petra Fried, the programme's executive producer, told the Observer. "We were excited about Hulu because they wanted to start showing original drama and wanted something that would make a splash."

Screened this summer, Misfits was Hulu's most viewed show and has now had a total of more than nine million viewers. As a result, Clerkenwell Films, the London-based makers of the show, announced on Thursday that they are now developing a US adaptation of the show with Josh Schwartz, the man behind the hit American series The OC and Gossip Girl.

"It suited the youth-skewed audience for Hulu, so it was a great place to start," said Fried. "People watched Misfits on their computers then tweeted about the experience, so it did well very quickly. This sort of computer viewing mirrors the way that older viewers watch box sets in one go. People were watching one episode of Misfits and then going back to the beginning to watch all of them."

The shows being developed to feed this appetite for complex storylines spinning out over several seasons has led to the phrase the "cinematisation of television" in America. One of the big beneficiaries in the marketplace has been BBC Worldwide, which is the world's largest distributor of TV programmes outside the major US studios. It saw revenues from digital rights rise by 32% to £82m in the last financial year, which represents 8% of its total revenue.

Analysis carried out by the BBC and by Screen Digest shows that most of the time-shifted viewing takes place just a few days after the original broadcast, so this benefits primetime drama content the most. People feel more relaxed about committing to an emotionally engaging series when they know they are not going to miss an episode.

Although there is no cheap equivalent to iPlayer or ITV player in America, the intelligent recording service TiVo and the computer streaming providers are beginning to alter behaviour. It is no surprise that the BBC's recently confirmed Delivering Quality First budget cuts have attempted to protect its investment in drama and the iPlayer service.